National Highways Authority of India (NHAI) and Welspun Enterprises have achieved financial closure for the Delhi - Meerut road PPP project.

NHAI and Welspun Delhi Meerut Expressway Private Limited (WDMEPL), a wholly­-owned subsidiary of Welspun Enterprises Limited, entered into the concession agreement on March 4, 2016 for the purpose of the development of the existing road from Km 0.000 to existing km 8.360 up to Delhi UP Border section of National Highway No.24 in the state of Delhi by six laning expressway to four laning either side of the Expressway thereof on design, build, operate and transfer basis.

Under the concession agreement, WDMEPL will develop Package I, 8.716 km length, of the Delhi ­- Meerut Expressway at a bid project cost of Rs8.415 billion (US$124.8 million), and operate it for a period of 15 years.

During construction, 40% of the total project investment will be funded by NHAI, with the balance 60% to be arranged by the concessionaire.

The private investment will be financed by way of mix of debt/equity of 48:12, 12 per cent being the promoter's contribution and rest will be funded by Punjab National Bank-led consortium of State bank of Hyderabad and Union Bank of India.

During the operation period, NHAI will also pay the concessionaire this 60% in semi­annual payments, along with interest thereon, NHAI will also pay the concessionaire operations and maintenance cost of Rs39.5 million annually (adjusted for inflation) for the maintenance of the project road during this period.

Construction of the project is to be completed in 2.5 years after Appointed Date. After completion, the maintenance of the 8.716 km project for 15 years will be done by Welspun Delhi-Meerut Expressway Pvt Ltd.

NHAI Chairman Raghav Chadra said. 

"The financial closure is the testimony of the trust that our stakeholders have in us. The highway will ensure smooth traffic flow within the capital and the express way, connecting to neighbouring towns, thereby increasing commuting convenience."

"With infrastructure spending going up, Hybrid Annuity Model is an opportunity to fast track highway projects and revive public- private-partnership mode. It will not only improve the traffic flow between the two states, but also contribute to enhancement of economic activity in the region."